By Barani Krishnan
Investing.com – Gold broke beyond the $1,800 per ounce target long eyed by bulls in the precious metal as concerns about a second wave of coronavirus infections colluded with stimulus measures aimed at helping economic recovery from the pandemic.
Some analysts predicted the yellow metal would set record highs above $2,000 in the coming months as Covid-19 cases ramp up.
“Speculation is a reason for change in gold prices,” tweeted Rachit Mehndirrata, an independent strategist on gold. “Investors speculate as to what government and central banks are going to do and then act.”
on Comex settled up $19.30, or 1.1%, at $1,800.50, after hitting an intraday high at $1,803.95. It was the highest ever reached by a benchmark Comex contract for gold since the all-time peak of $1,911.60 set in September 2011.
was $8.58, or 0.5%, higher at $1,781.20 by 3:40 PM ET (19:40 GMT), after a session high of $1,785.97. That was the highest for bullion since its September 2011 record of $1,920.85.
“I believe that with additional lockdowns happening globally that central banks will continue to support the market at any cost,” said Philip Streible, Chief Market Strategist at Blue Line Futures in Chicago.
“This should result in the Fed’s balance sheet continuing to grow and in turn provide underlying support in the precious metals markets. Gold should continue to track higher with $1900 by Labor Day, $2000 by Thanksgiving.”
New cases of the Covid-19 have been raging again across the United States and other key economic centers of the world — a phenomenon that those long the market have done their best to downplay or ignore.
The United States has reported some 40,000 new coronavirus cases in the so-called “second-wave” of the outbreak and top U.S. pandemics expert Anthony Fauci said on Tuesday this could grow to 100,000 without proper social-distancing and other safety measures.
Other health officials said the true national caseload was probably 10 times the official count. These come as 2.7 million Americans have already been infected by the coronavirus, with a death toll nearing 130,000. A new model by the University of Washington also predicts 200,000 coronavirus deaths in the United States by Oct. 1.
Outside of the United States, China to India to New Zealand have all had higher caseloads recently.
The U.S. Federal Reserve and Congress have passed more than $3 trillion in stimulus to aid economic recovery from the pandemic.
The International Monetary Fund has, meanwhile, slashed its already gloomy growth projections for 2020, saying it expected the global economy to now contract by 4.9 percent this year. That was much lower than the 3 percent drop it forecast in April.
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